Navajo Nation v. Azar II ( 2018 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
THE NAVAJO NATION,
Plaintiff,
v.
Civil Action No. 18-0253 (DLF)
ALEX M. AZAR II, Secretary, United States
Department of Health and Human Services,
Defendant.
MEMORANDUM OPINION
Before the Court is the Plaintiff’s Motion for a Preliminary Injunction. Dkt. 2. For the
following reasons, the Court will deny the motion and order the parties to propose an expedited
schedule for resolving this case on its merits.
I. BACKGROUND
Under the Head Start Act, the U.S. Department of Health and Human Services (“HHS”)
provides grants to tribes that implement Head Start and Early Head Start programs for young
children and their families. 42 U.S.C. § 9831 et seq.; Compl. ¶ 1, Dkt. 1. Qualified
organizations can receive grants for up to 80% of Head Start program costs. 42 U.S.C.
§ 9835(b). The grants are administered by a division of HHS, the Administration of Children
and Families (“ACF”). Compl. ¶ 2.
The plaintiff, the Navajo Nation, is a federally recognized Indian tribe whose reservation
spans parts of Arizona, New Mexico, and Utah. Id. ¶ 11. It runs Head Start and Early Head
Start programs to provide education services to its young members and residents and their
families. Id. ¶ 1. The programs are funded primarily by an ACF-administered federal grant, No.
90C19889 (“the Grant”), which is at the center of this case. Id. ¶ 2; Aff. of Dr. Elvira Bitsoi
(“Aff.”) ¶ 3, Dkt. 3-1. The Grant’s budgetary period, or fiscal year, starts on March 1 each year
and runs through February of the next year. Compl. ¶ 17. The Navajo Nation must submit an
annual renewal application for the Grant, which is due on December 1 before the new fiscal year
starts. Id. ¶ 18. Pursuant to the Grant in recent fiscal years, the Navajo Nation has received
$23,075,043 annually. Id. ¶ 3.
Under the Head Start Act, however, grants are not static from year to year. The Act
provides specific procedures for adjusting grants to Head Start programs that suffer from chronic
under-enrollment, as Navajo Head Start does. Grantees must self-report enrollment each month,
42 U.S.C. § 9836a(h)(2), and HHS must conduct a semiannual review to determine which
grantees have been under-enrolled for four consecutive months, id. § 9836a(h)(3). HHS and
each under-enrolled grantee must then develop a plan and timetable for reducing under-
enrollment, and the grantee “shall immediately implement the plan.” Id. § 9836a(h)(3), (4). If
the grantee does not reach at least 97% enrollment within twelve months, HHS may designate
the grantee as chronically under-enrolled and “recapture, withhold, or reduce” the base grant by a
percentage calculated as the difference between funded and actual enrollment. Id. §
9836a(h)(5)(A). Also, HHS may waive or decrease the adjustment in specified circumstances.
Id. § 9836a(h)(5)(B). If HHS adjusts funding for an Indian Head Start program, HHS must
redistribute the resulting funds to other Indian Head Start programs by the end of the following
fiscal year. Id. § 9836a(h)(6).
HHS followed these statutory procedures to adjust the Navajo Grant for fiscal year 2018,
which will run from March 1, 2018 to February 28, 2019. Decl. of Angie Godfrey (“Decl.”)
¶¶ 7–13, Dkt. 11-1. Although HHS stated in early September that the Grant would not change
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for fiscal year 2018, see Compl. ¶ 19, the agency changed course a few weeks later. By letter on
September 26, 2017, HHS informed the Nation that HHS had decided to reduce the Grant to
$15,766,194 for fiscal year 2018, based on an enrollment level of 1,396 students in Navajo Head
Start, not the previously funded enrollment of 2,068 Head Start students. Decl. Ex. E, Dkt. 11-2
at 14–15. Despite implementing the 12-month remediation plan required by the Head Start Act,
the Nation had been unable to achieve or maintain its funded enrollment of 2,068 Head Start
students; the reduction by 672 students “represented the average number of vacant slots over a
12 month period.” Decl. ¶ 14; see also Decl. Ex. A, Dkt. 11-2 at 1 (listing reported enrollment
for each month since March 2015). 1 In additional letters on October 5, November 22, and
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December 4, 2017, HHS reiterated that the Grant would be $15,766,194 for fiscal year 2018.
See Decl. Exs. F, I, & J, Dkt. 11-2 at 16, 25, 27. The letter of December 4 stated that, if the
Navajo Nation submitted a funding application for a higher figure, HHS would “return the
application as unfundable and request a revised application for the correct funding and
enrollment levels.” Id. ¶ 22.
The Navajo Nation’s funding application for fiscal year 2018 was due on December 1,
2017, but the Nation received a 45-day extension. Id. ¶ 23. The application was submitted on
January 12, 2018, but it again requested the prior funding level of $23,075,043. Id. ¶ 24. HHS
refused the Navajo Nation’s request. By letter on January 19, 2018, HHS again advised the
Navajo Nation that the Grant would be $15,766,194 for fiscal year 2018. Decl. Ex. M, Dkt. 11-2
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The Grant funds the Nation’s Head Start and Early Head Start programs, but the reduction
appears driven by under-enrollment in Head Start only. The HHS letter of September 26 reduced
the Grant amount apportioned to Head Start, as compared to the HHS letter of September 2.
Both letters, however, apportioned the same amount to Early Head Start based on the same
enrollment: $586,277 for 37 students in Early Head Start. Compare Decl. Ex. D, Dkt. 11-2 at
12, with Decl. Ex. E, Dkt. 11-2 at 15.
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at 32–33. HHS also reiterated that funding was reduced because the Navajo Head Start program
was chronically and severely under-enrolled. See id.
On February 22, 2018, the Navajo Nation filed its complaint in this action. Dkt. 1. The
complaint asserted that (1) HHS—by not promulgating regulations permitting grantees like the
Nation to appeal grant reductions in cases of under-enrollment—violated a provision of the Head
Start Act that directs HHS to prescribe procedures “to assure that financial assistance . . . may be
terminated or reduced” after reasonable notice and an appeal hearing, see 42 U.S.C. §
9841(a)(3); Compl. ¶¶ 27–30; and (2) HHS then violated the Administrative Procedure Act by
reducing the Navajo Grant without following statutorily mandated procedures, see 5 U.S.C.
§ 706(2); Compl. ¶¶ 31–33.
On the same day, the Nation moved for a preliminary injunction to prevent HHS from
reducing the Grant below $23,075,043 pending the disposition of this case. Mot. for Prelim. Inj.
at 1, Dkt. 2. The motion was accompanied by an affidavit by the Acting Assistant
Superintendent of Navajo Head Start, see Dkt. 3-1, and the motion requested a decision before
March 1, 2018, when fiscal year 2018 begins. Pl.’s Mem. at 8, Dkt. 2-1.
The Navajo Nation effected service of the complaint and summons on the U.S. Attorney
and the U.S. Attorney General on February 9, 2018, see Dkt. 6 & 7, and on the HHS Secretary
on February 12, 2018, see Dkt. 8. But the Navajo Nation did not immediately serve the motion
for a preliminary injunction. See Plaintiff’s Response to Defendant’s Notice (Feb. 21, 2018),
Dkt. 10 at 1–2 (“Although copies of the motion for preliminary injunction . . . were prepared and
were supposed to be included with the summons and complaint, . . . they were inadvertently
omitted.”). As a result, the government’s deadline for opposing the motion was not triggered.
See Local Civil Rule 65.1(c). On February 21, 2018, the Court ordered the Nation to serve the
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motion immediately. See Minute Order of February 21, 2018. The Court also set a briefing
schedule for the motion in order to facilitate a decision before March 1, 2018. Id. Accordingly,
HHS filed an opposition brief accompanied by the declaration of the Regional Program Manager
who oversees Head Start grants to American Indian programs. Dkt. 11. The Nation then filed a
reply brief accompanied by a supplemental affidavit. 2 The Court now resolves the motion.
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II. LEGAL STANDARD
A preliminary injunction is “an extraordinary remedy that may only be awarded upon a
clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc.,
555 U.S. 7, 22 (2008). To warrant a preliminary injunction, a plaintiff “must make a clear
showing” that (1) he “is likely to succeed on the merits”; (2) he “is likely to suffer irreparable
harm in the absence of preliminary relief”; (3) the “balance of equities” tips in his favor; and (4)
“an injunction is in the public interest.” Id. at 20; League of Women Voters of United States v.
Newby, 838 F.3d 1, 6 (D.C. Cir. 2016). The last two factors “merge when the Government is the
opposing party.” Nken v. Holder, 556 U.S. 418, 435 (2009). The plaintiff “bear[s] the burdens
of production and persuasion” when moving for a preliminary injunction. Qualls v. Rumsfeld,
357 F. Supp. 2d 274, 281 (D.D.C. 2005) (citing Cobell v. Norton, 391 F.3d 251, 258 (D.C. Cir.
2004)).
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The Court notes in passing that the supplemental affidavit, Dkt. 12-1, is not properly before the
Court. Under the local rules, applications for a preliminary injunction “shall be supported by all
affidavits on which the plaintiff intends to rely” and “[s]upplemental affidavits either to the
application or the opposition may be filed only with permission of the court.” Local Civil Rule
65.1(c) (emphasis added). The Navajo Nation did not seek leave of court to file the
supplemental affidavit submitted with the reply. Nevertheless, the Court has reviewed the
affidavit and finds the Nation’s noncompliance “to be of no moment” because the supplemental
affidavit “ha[s] not influenced the Court to rule in [the Nation’s] favor regarding the irreparable
harm factor.” Am. Meat Inst. v. U.S. Dep’t of Agric., 968 F. Supp. 2d 38, 77 n.35 (D.D.C.
2013); see also Sataki v. Broad. Bd. of Governors, 733 F. Supp. 2d 1, 9 n.11 (D.D.C. 2010).
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“Before the Supreme Court’s decision in Winter, courts weighed the preliminary
injunction factors on a sliding scale, allowing a weak showing on one factor to be overcome by a
strong showing on another factor.” Standing Rock Sioux Tribe v. U.S. Army Corps of Eng’rs,
205 F. Supp. 3d 4, 26 (D.D.C. 2016). The D.C. Circuit, however, has “suggested, without
deciding, that Winter should be read to abandon the sliding-scale analysis in favor of a ‘more
demanding burden’ requiring a plaintiff to independently demonstrate both a likelihood of
success on the merits and irreparable harm.” Id. (quoting Sherley v. Sebelius, 644 F.3d 388, 392-
93 (D.C. Cir. 2011)); see also Davis v. Pension Benefit Guar. Corp., 571 F.3d 1288, 1292 (D.C.
Cir. 2009).
Regardless of whether the sliding scale analysis survives Winter in this Circuit, it is clear
that failure to show a likelihood of irreparable harm remains, standing alone, sufficient to defeat
the motion. “[T]he basis of injunctive relief in the federal courts has always been irreparable
harm.” Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006)
(quoting Sampson v. Murray, 415 U.S. 61, 88 (1974)). As such, a plaintiff must show that
“irreparable injury is likely in the absence of an injunction,” regardless of whether the sliding
scale analysis survives Winter and regardless of whether the plaintiff satisfies the other three
factors. Winter, 555 U.S. at 21–22 (emphasis in original); see Chaplaincy, 454 F.3d at 297.
Therefore, the Court need not resolve whether the sliding scale test is viable after Winter. The
plaintiff here cannot show likely irreparable harm, so the outcome of this case is the same under
either test.
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III. ANALYSIS
Injunctive relief is not warranted because the Navajo Nation has failed to show that it is
likely to suffer irreparable harm, which is grounds alone for denying the Nation’s motion. See
Chaplaincy, 454 F.3d at 297.
The D.C. Circuit “has set a high standard for irreparable injury,” Mdewakanton Sioux
Indians of Minn. v. Zinke, 255 F. Supp. 3d 48, 52 (D.D.C. 2017) (quoting Chaplaincy of Full
Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006)), and a mere possibility is not
enough, see Winter, 555 U.S. at 22. “First, the injury must be both certain and great; it must be
actual and not theoretical. The moving party must show the injury complained of is of such
imminence that there is a clear and present need for equitable relief to prevent irreparable harm.
Second, the injury must be beyond remediation.” Chaplaincy, 454 F.3d at 297 (quotation marks,
citations, and alterations omitted).
The Navajo Nation fails to show that it is likely to suffer irreparable harm from the HHS
decision to reduce the Grant from approximately $23.1 million to $15.8 million for fiscal year
2018. According to an affidavit submitted by the Acting Assistant Superintendent for Navajo
Head Start, the funding adjustment would cause 672 children and families to lose access to Head
Start services. Id.; Aff. ¶ 3. The affidavit also states that the Nation will have to lay off at least
147 employees and reduce the hours of 40 other employees, which would “necessitate the
closure of a minimum of 34 Head Start facilities.” Aff. ¶ 3. According to the Assistant
Superintendent’s supplemental affidavit, these changes could begin on March 1, 2018: if the
funding adjustment occurs on that date, she will begin identifying personnel to be laid off and
facilities to be closed, and she “anticipate[s] that layoffs would begin within a couple of weeks
thereafter.” Supp. Aff. of Dr. Elivra Bitsoi (“Supp. Aff.”) ¶ 5, Dkt. 12-1 at 2. Based on these
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assertions, the Navajo Nation argues that the “Nation and the children currently served by the
Navajo Head Start program will suffer irreparable harm starting on March 1, 2018 if HHS is
allowed to reduce the Grant without affording the Nation the appeal rights to which it is
entitled.” Pl.’s Mem. at 7.
The Court disagrees. First, it appears unlikely that 672 students will lose access to Head
Start services due to the HHS decision. The Navajo Nation puts forth 672 as the number of
children who will lose access, which is the difference between the number of students for whom
Head Start enrollment was previously funded by HHS (2,068) and the Head Start enrollment
level on which HHS based its funding decision for fiscal year 2018 (1,396). See Compl. ¶ 20;
Pl.’s Mem. at 6. HHS reduced the funded enrollment level by 672 because that number
“represent[s] the average number of vacant slots over a 12 month period” during which HHS and
the Nation sought to remediate under-enrollment. Decl. ¶ 14. Indeed, according to Navajo
Nation’s self-reported enrollment figures, Head Start enrollment has never exceeded 1,577 in any
month since March 2015. Decl. Ex. A, Dkt. 11-2 at 1. And during the months in which HHS
decided to adjust funding for fiscal year 2018, reported enrollment was less than the enrollment
that HHS ultimately funded: the Navajo Nation reported 1,187 Head Start students in September
2017, 1,280 in October 2017, 1,304 in November 2017, and 1,394 in December 2017. Id.
Therefore, funded enrollment appears consistent with reported enrollment, and it seems unlikely
that there are 672 additional, actual students who would enroll but for HHS’s decision.
Second, although the Navajo Nation asserts that it will have to layoff employees and
close facilities in the absence of preliminary relief, it is not clear that these alleged harms are
sufficiently great, certain, or imminent to warrant injunctive relief. The Nation states that, if a
loss of funding occurs on March 1, 2018, it will begin identifying personnel to be laid off and
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facilities that must be closed, and it “anticipates that layoffs would begin within a couple weeks
thereafter.” Reply. at 7, Dkt. 12; Supp. Aff. ¶ 5. These alleged harms, therefore, will not arise
immediately on March 1 and they can be mitigated by resolving this case on the merits according
to an expedited litigation schedule, which the government suggests and which the Court intends
to set. See Def.’s Notice, Dkt. 9 at 2; Def.’s Opp. at 1 n.1, Dkt. 11; see also Order, Dkt. 13.
Thus, the alleged harms do not “creat[e] a clear and present need for extraordinary equitable
relief to prevent harm.” Pinson v. DOJ, 273 F. Supp. 3d 1, 13 (D.D.C. 2017) (quoting Wis. Gas
Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985)).
Moreover, the Nation’s past practice indicates that it does not require immediate access to
$23.1 million to provide the same level of Head Start services in fiscal year 2018 as it provided
in past years. The Nation regularly fails to spend millions of dollars of its Head Start funds in a
budget year. Decl. ¶ 6. In fiscal year 2016, the Navajo Nation obligated only $19.3 million of
$25.5 million awarded. Id. In fiscal year 2017, the Navajo Nation is expected to obligate only
$17.4 million of $23.1 million awarded. Id. In those years, the Head Start programs served a
similar or higher number of students than expected for fiscal year 2018, which undercuts the
Nation’s assertion that it will be gravely harmed on March 1 unless the full $23.1 million is made
available immediately. See Decl. Ex. A, Dkt 11-2 at 1.
Third, even without preliminary relief, HHS will award the Nation $15.8 million for
fiscal year 2018. Decl. ¶ 29. The Nation replies that its 2018 grant application “was denied in its
entirety,” so in fact “the Navajo Nation has no approved Head Start funding whatsoever for
Fiscal Year 2018.” Supp. Aff. ¶ 6; see also Reply at 6. The Navajo Nation may have
contributed to this issue by maintaining its request for $23.1 million in its application of January
12, 2018, see Pl.’s Mem. at 2, despite extensive notice over the previous months that the
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Nation’s enrollment did not justify that amount, see, e.g., Decl. Exs. E, F, I, J, & K. Regardless,
the Navajo Nation is incorrect because HHS clearly represents that $15.8 million will be
awarded: “On March 1, 2018, [HHS] plans to award the Navajo Nation $15,766,194. That
entire amount will be available at that time for the Navajo Nation to spend on appropriate Head
Start expenditures, subject to grant conditions.” Decl. ¶ 29.
In addition to that sum, HHS has committed to restoring $2 million if the Navajo Nation
meets certain conditions, the most stringent of which appear to be (1) maintaining enrollment
levels of 1,396 Head Start students and (2) creating a wait list of children eligible to fill the
approximately 180 to 200 additional seats funded by the restored funding. See Decl. ¶ 27; Decl.
Ex. M, Dkt. 11-2 at 32–33.
Furthermore, the Navajo Nation can request to carryover its unobligated Head Start funds
from fiscal years 2016 and 2017. See 45 C.F.R. § 75.309; HHS Grants Policy Statement at II-51
& App. B-2 (Jan. 1, 2007). For fiscal year 2016, the Navajo Nation had approximately $6.3
million in unobligated Head Start funds. Of that amount, the Nation asserts that $5.1 million is
unavailable for personnel expenses because HHS has approved its use for projects involving
physical infrastructure for the Head Start program. Reply at 7; Supp. Aff. ¶ 11; Supp. Aff. Exs.
B & C, Dkt. 12-1 at 11–20. Even so, that leaves at least $1.2 million that the Nation can
carryover from fiscal year 2016. HHS “is still waiting for information from the Navajo Nation to
process the carryover of these funds, but once the Navajo Nation provides that information those
carryover funds would be available to provide Head Start services.” Decl. ¶ 6. Also, the Nation
could seek to re-apply the other $5.1 million from physical infrastructure to personnel expenses.
See id.; HHS Grants Policy Statement at II-51.
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For fiscal year 2017, HHS anticipates that the Navajo Nation will have approximately
$5.7 million in unobligated 2017 funds available for carryover. Id. The Nation disputes that
estimate, but the Nation does not provide any reasons for its disagreement, nor does it offer an
alternative estimate. See Reply at 6–7; Supp. Aff. ¶ 10.
Based on these various available funds, the Navajo Nation will have a minimum of $15.8
million immediately for fiscal year 2018, and that sum can be supplemented by up to $2 million
in restored funds, $1.2 million in 2016 carryover funds, $5.7 million in 2017 carryover funds,
and $5.1 million in re-applied 2016 carryover funds, for a total that exceeds the $23.1 million
that the Nation considers sufficient to maintain its Head Start programs. As a result, the Navajo
Nation has failed to show that HHS’s decision is likely to cause “certain,” “great,” and
“imminen[t]” harm so as to warrant preliminary relief.
Also, the Nation has failed to show that any harm would be irreparable, the “key word in
th[e] consideration” of irreparable harm. Chaplaincy, 454 F.3d at 297 (quotation marks
omitted). “It is . . . well settled that economic loss does not, in and of itself, constitute
irreparable harm.” Wisconsin Gas Co., 758 F.2d at 674. “The possibility that adequate
compensatory or other corrective relief will be available at a later date, in the ordinary course of
litigation weighs heavily against a claim of irreparable harm.” Chaplaincy, 454 F.3d at 297–98
(quotation marks omitted). Without preliminary relief, the Nation will have access to at least
$15.8 million instead of $23.1 million on March 1, so the Nation will be unable to immediately
draw on $7.3 million of funds that it believes should have been awarded. But to the extent this
shortfall represents an unlawful loss, the Nation may be able to recover it through the ordinary
course of litigation. Therefore, the alleged economic loss here is not “beyond remediation.” Id.
at 297.
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Based on the foregoing analysis, the Navajo Nation has failed to demonstrate that, in the
absence of a preliminary injunction, it is likely to suffer irreparable harm before a decision on the
merits can be rendered. Without this showing, the Nation is not entitled to preliminary relief.
See Chaplaincy, 454 F.3d at 297 (“A movant’s failure to show any irreparable harm is therefore
grounds for refusing to issue a preliminary injunction, even if the other three factors entering the
calculus merit such relief.”); Nat’l Parks Conservation Ass’n v. Semonite, No. 17-cv-01361,
2017 WL 4776985, at *2, *5 (D.D.C. Oct. 20, 2017) (denying motion for preliminary injunction
without considering factors other than likely irreparable harm); GEO Specialty Chems., Inc. v.
Husisian, 923 F. Supp. 2d 143, 147, 151 (D.D.C. 2013) (same). The Court will therefore deny
the Navajo Nation’s motion for a preliminary injunction and set an expedited litigation schedule
for resolving this case on its merits.
CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for a Preliminary Injunction, Dkt. 2, is
denied. A separate order consistent with this decision accompanies this memorandum opinion.
________________________
DABNEY L. FRIEDRICH
United States District Judge
Date: February 28, 2018
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